Third Party Verification & Privacy

Answered by:

Question:

In relation to the Privacy Act, is verifying funds for a 3rd party (i.e. merchant verification of funds) an exception under 14 or 15? I attended the Pegasus Privacy Seminar recently.

Answer:

Yes. However, prudent information security practices warrant that you have some means of knowing who you're dealing with in providing the information and that they are in fact legitimately verifying funds on a check your customer wrote. This may require additional authentication techniques than previously used.

First published on BankersOnline.com 2/4/02